crash - All posts tagged crash

As a long-term investor in stocks like Apple, Google, Facebook, Sandisk and so on, I would probably look to start to scale into some of my favorite such Revolution Investing names on an opportunistic basis. I’ve also trimmed most of my personal positions so a major Greece/EU crisis-driven sell off would enable me to buy some of those shares back.

In 2007 and early 2008, I warned everybody about the real-estate securities crash that would take down the largest banks and many billionaires in its wake. I don’t see the same crash dynamic built up right now. In fact, I continue to bet on higher prices in the stocks I own and in my overall general exposure right now. But I don’t want to be complacent, and neither should you.

Where is the next VRNG, NQ, BBRY and A123 and how best can we most safely try to profit from its coming fall? At times, we’ve complemented our profits by catching the collapse of some of these stocks, but I never did get a position built for myself in Vringo or NQ despite my conviction in my bearish analysis for them.

We know that the developed world’s governments here and around the world are actively engaging in broad-reaching currency wars, mostly trying to keep their currencies weak in the name of spurring export growth and helping transnational conglomerates maximize their reported earnings. We know that the Fed is in way uncharted (and frankly, un-”chartered“) territory using all kinds of tools like 0% interest rates and QE and so on to artificially repress interest rates and force people to take on excess risk in search of yield.

In my book, Everything You Need to Know About Investing, I wrote this about day trading, “If you’re day trading, you have to plan for both hot and cold streaks that will come and you have to know and be able to handle that some of those hot and cold streaks will last longer and shock you more than you’d ever thought possible. And that over the next 10,000 days, all investors and traders need to get more trades right than wrong and maximize their gains while minimizing their losses as they do so, no matter their time-horizons for each individual position and no matter what’s going on in the economy or the broader markets.”

I don’t remember the last time if ever that I bought VIX puts. I wouldn’t look to buy VIX puts unless the index spikes closer to 30 or so giving you some serious downside in the VIX (and profits in your puts) if the fear in the markets recede. I could easily see the VIX staying between 15-22 or so for the next few weeks or even months or even spiking closer to 30 before the next move up in the stock markets begins.

One-month shutdown could cost stocks 30%: Barry Ritholtz - I love Barry and he’s an old friend of mine dating back to the time I met him when I walked off an investment panel in which Lenny Dykstra told the audience, “You can’t lose with my options trading strategy!” Anyway, I don’t disagree with Barry’s analysis here, but I do think the market is set up for a, as I put in on my Scutify feed yesterday, “Valuations, timing, part of cycle and simply the fact that back at the last “fiscal cliff crisis,” there was REAL PANIC about the fiscal cliff amongst headlines/investors and this time…the consensus really seems to be “We’ll rally when the get resolution”. I think Mr Market including $SPY, $DJIA, $QQQ will look to dole out some pain instead. FLIP IT!

Remember the stock market bubble that the Fed helped drive back in the late 1990s when the cut rates out of Y2K fears? Remember the stock market bubble that we got when the Fed drove rates artificially below market rates in the mid 2000s? Imagine what 0% interest rates, relaxed accounting rules and trillions of dollars worth of mortgage backed security purchases at inflated prices dictated to the Fed by the selling banks is going to end up doing in the bubble-blowing arena.

Reports of a new U.S. warfront in Syria after reports of chemical weapons use is driving a market panic. As always we have no choice but to address what this means to our stocks and options and portfolios.

About The Cody Word

Cody Willard writes the Revolution Investing investment newsletter for MarketWatch and posts the trades from his personal account at TradingWithCody.com He is the founder of WallStreetAll-Stars.com and the principal of CL Willard Capital. Cody serves as an adjunct professor at Seton Hall University and is on the University of New Mexico Alumni Board. He was an anchor on the Fox Business Network, where he was the co-host of the long-time #1-rated show on the network, Fox Business Happy Hour. Cody, a former hedge fund manager, and his stock picks and economic outlooks have been featured on NBC’s The Tonight Show with Jay Leno, ABC’s 20/20, CBS Evening News, CNBC’s SquawkBox, Jon Stewart’s The Daily Show, as well as in the Financial Times, Wall Street Journal, New York Times, and many other outlets.